Accenture Research Finds Lack of Trust in Third-Party Providers Creates Major Opportunity for Banks as Open Banking Set to Ro...
October 02 2017 - 1:59AM
Business Wire
Less than six months before PSD2 implementation
, U.K. consumers reluctant to trust third-party providers with
their bank details
Less than six months before the Revised Payments Service
Directive (PSD2) makes open banking a reality across Europe,
research from Accenture (NYSE:ACN) has found that two-thirds of
consumers in the U.K. said they won’t share their personal
financial data with third-party providers, giving banks the
opportunity to benefit from the trust they have built with their
customers over the years.
One of the drivers for open banking in the U.K., PSD2 will
enable consumers to share their financial data securely with both
banks and third parties, making it possible to more easily transfer
funds, compare products and manage their accounts without their
bank’s involvement.
Surveying more than 2,000 U.K. consumers, Accenture Research
found that online retailers, tech firms and social-media companies
face an uphill battle to expand into the financial services sector,
with 69 percent of consumers saying they would not share their
bank account information with these third-party providers. In fact,
more than half (53 percent) of the consumers said they will never
change their existing banking habits and adopt open banking.
The research suggests that retail and social-media companies did
not fare well with consumers, with 73 percent of consumers
reluctant to share personal financial information with retailers
and 93 percent reluctant to share that information with
social-media companies.
Trust in online platforms and social-media companies as
providers of payments services is also low, with the majority of
consumers saying they would be unwilling to initiate a payment
through online platforms (58 percent) and social-media companies
(82 percent). This could pose a particular challenge for social
media companies building marketplace and commerce platforms.
Meanwhile, only one-quarter (26 percent) of consumers said they
trust online payment companies to make and schedule their
payments.
“Open banking has the potential to transform consumers’
relationship with financial products, but it hinges on consumers’
willingness to embrace it,” said Jeremy Light, a managing director
at Accenture who leads the company’s Payment Services Practice in
Europe. “Until new entrants to the financial services sector can
earn consumers’ trust, banks can draw on their extensive heritage
to secure an important early advantage.”
Fraud is the primary obstacle to consumers embracing open
banking, with 85 percent claiming increased risk of fraud as the
biggest barrier to them sharing bank account information with
third-party providers. Data protection risks and the potential for
cyber attacks or viruses were also noted as major concerns by those
considering open banking, cited by 74 percent and
69 percent of consumers, respectively.
“The immediate challenge for participating retailers, fintechs,
social-media companies and banks is to develop propositions for
those consumers willing to use open banking, encouraging repeated
use and fueling wider adoption,” Light said. “Retailers will also
need to communicate clearly with their customers to demonstrate the
potential benefits of giving consent to sharing their bank
information, whether to receive discounts or gain access to credit.
And given consumers’ fear of fraud, strong customer authentication
— including two-factor authentications and the use of biometrics —
will be important to address both fraud levels and the perception
of security among consumers.”
Accenture’s research suggests that banks are well-placed to
weather the introduction of open banking, with more than half (59
percent) of British consumers saying they would trust only their
own bank with their account information when seeking services like
a better mortgage rate or savings account. By contrast, only one in
10 consumers or fewer said they would trust online payment
companies (10 percent), online retailers (9 percent) and
social-media companies (3 percent) with their account
information when seeking those same services.
Yet banks cannot afford to be complacent. While appetite for
open banking seems low now, younger consumers – those aged under 37
– appear more willing to trust non-traditional service
providers.
One-third (39 percent) of Gen Z respondents – those born after
1996 – describe themselves as likely to use open banking instead of
their usual method of payment in the future, compared with just 13
percent of Baby Boomers (those born between 1946 and 1964).
Furthermore, as younger consumers are becoming more interested in
interacting with their bank through social media, wearables and
instant messaging, traditional banks need to continue to innovate
to provide a superior customer experience or risk get disrupted by
tech giants and retailers that are setting the bar in this
space.
The generational divide is also evident among the one-third (33
percent) of consumers willing to give online retailers permission
to initiate payments directly from their bank account using either
apps or websites. This figure rises to 42 percent among millennials
(those born between 1980 and 1995) and 52 percent among Gen Zers,
suggesting an opportunity for online retailers ready to offer
services targeting younger consumers.
“With UK consumers placing their faith in traditional service
providers, banks can capitalize on the opportunities to create new
revenue streams and capture new customers, which the era of open
banking provides,” Light said. “If banks move too slowly to adapt
to this transformed, open banking landscape, they could miss out on
the platform-based business models and the strategies they enable.
In short, banks will need to up their digital game or risk failing
to meet growing consumer demand for a seamless digital
experience.”
About the Accenture UK Open Banking Survey
For the research, Accenture conducted an online survey of 2,008
U.K. consumers during August 2017, with the sample weighted to
ensure it was representative of the U.K. population.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries
and all business functions – underpinned by the world’s largest
delivery network – Accenture works at the intersection of business
and technology to help clients improve their performance and create
sustainable value for their stakeholders. With approximately
425,000 people serving clients in more than 120 countries,
Accenture drives innovation to improve the way the world works and
lives. Visit us at www.accenture.com.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171001005012/en/
AccentureAndy Rowlands, +44 7952 594
784andy.rowlands@accenture.com
Accenture (NYSE:ACN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Accenture (NYSE:ACN)
Historical Stock Chart
From Sep 2023 to Sep 2024